And finally…. the Nasdaq’s mini-recovery from its post-midterms plunge is complete.

The main US tech index has closed for the night up 1.09%, with a gain of 264 points to end at 24,579 points.

But the broader picture is that the Nasdaq Composite has now fallen for four weeks running, as some of the air has come out of the AI bubble…

We’ll find out on Monday whether the recovery continues, or the sell-off resumes…. Goodnight. GW

A late update: With two hours to go before Wall Street closes, the tech rebound continues.

The Nasdaq Composite index, which sank into ‘correction territory’ yesterday, is up 1.3% now.

Aerospace manufacturer and launch service provider Rocket Lab are the top riser, up 12.5%, followed by Airbnb (+11.7%), AppLovin (+10%), Advanced Micro Devices (+9.3%) and Intel (+8.9%).

But….Fawad Razaqzada, market analyst at Stonex Trading and FOREX.com, says AI concerns linger, explaining:

Technology stocks staged a sharp recovery on Friday after yesterday’s brutal sell-off wiped trillions of dollars off global equity valuations. All major AI-related stocks – Nvidia, AMD, Broadcom and Core Weave – bounced back. But whether recovery holds is another matter.

After Thursday’s brutal sell-off wiped trillions of dollars off global equity valuations. Today’s bounce has carried the Nasdaq 100 straight back into former support, and the worries behind the rout, from AI regulation to the sheer scale of tech spending, have not gone away.

With the index still carving out lower highs and lower lows, we maintain a cautious Nasdaq 100 forecast, and the near-term risk remains tilted to the downside.

With European stock markets closed after a nervy day, and Wall Street calmer than yesterday, it’s time to wrap up…

European stock markets fell sharply today as a rout in US tech stocks spread across the Atlantic, after the Democrats’ midterms victory sparked fears of a slowdown in the AI industry.

A sell-off on Wall Street on Thursday was followed by sharp falls in Asian stocks markets overnight. The investor sentiment then reached London, where the market was, at one stage, poised for its worst day since March.

The FTSE 100 index, which tracks blue-chip shares listed in London, was down as much as 254 points, or 2.35%, at 10,528 points during a wave of selling in morning trading. But by the close of the day it had recovered to a 1% fall, helped by a bounce in US stocks when Wall Street reopened.

Across Europe, there were similar losses: Germany’s Dax index has fallen by 2%, France’s Cac 40 has lost 0.8%, and Spain’s Ibex ended the day down 0.6%. Italy’s FTSE Mib fell 0.9%.

In Asia-Pacific markets, Japan’s Nikkei 225 index sunk 6% and South Korea’s Kospi index tumbled more than 6.5%.

“It’s actually a bit of a disaster,” said Christopher Forbes, the head of Asia and Middle East at CMC Markets.

“[Clients] were long index, long stocks, and they all got carried out. All night, all day – we had client margin calls, client complaints … because it’s a very emotional thing, right? People are wedded to their positions and views on a stock or outcome, and you’re telling them: ‘Look, you’ve just lost money.’”

Over in New York right now, the Nasdaq is up 1.5% (having fallen by 5.5% yesterday), and the S&P 500 is up 0.7%.

Here’s the full story:

Here’s the rest of today’s top business news:

Global financial markets have been thrown into a tailspin as investors bet on an AI slowdown after the US midterm elections.

This is not the first time stock markets have wobbled in recent months due to concerns over a tech bubble. But could this volatility be the start of a huge market meltdown?

Read more here:

Phew! After a volatile day’s trading, the London stock market is closed.

And after an early slump, triggered by Thursday’s Wall Street rout, UK stocks have recovered some of their losses.

The FTSE 100 share index has closed for the night down 108.7 points, or 1%, at 10,673 points.

That will make a dent in millions of ISAs and pensions, but it’s not as bad as this morning’s worst point when the Footsie was down 2.35% and heading for its worst day since March.

Trading platform Hargreaves Lansdown reports that its clients have been “buying the dip” – the practice where investors pile in when a stock falls to tempting levels.

Anna Macdonald, investment strategy director at Hargreaves Lansdown, suggests this week’s tech selloff (which is already unwinding) is a buying opportunity:

Macdonald says:

“Trading interest in overseas AI and technology companies has been growing all week. We’ve seen some larger investors taking risk off the table, but the average trade has been a buy with Nvidia, SpaceX, Micron, AMD and Alphabet making up the top five. Nvidia and SpaceX are the headline names, while Micron and AMD give investors exposure to the hardware side of the story. Alphabet is interesting too, as its shares were marked down after disappointing numbers and clients have used that as an opportunity to buy.

Overall, many of our clients are taking a long-term view and see this as a moment to get back into some of these names at a cheaper entry point.

Yesterday’s sell-off looks like an overreaction. We’ve seen these wobbles before and we’ll see them again, but investors need to focus on the fundamentals. Demand for AI isn’t going away, and we expect the newly elected US officials to take a pragmatic approach to the buildout.

For patient investors, this is an opportunity to invest in high-quality companies at valuations we haven’t seen in a long time.”

[We don’t do investment advice here at the Guardian, beyond Caveat emptor, dear readers.]

Ding ding goes the Wall Street opening bell, and trading is underway after the US stock market’s most bruising day in 19 months yesterday.

And it’s a mixed picture!

Tech stocks are rising, lifting the Nasdaq up by 1.2% in early trading. AI-linked stocks such as AMD (+8.1%), SanDisk (+8.3%) and Nvidia (+6.5%) are among the top risers.

But the much-storied Dow Jones Industrial Average (DJIA) is moving the other way, down 1% at the open. It’s being dragged down by old-economy stocks such as Nike (-3.5%), Walmart (-3.2%) and McDonalds (-3.1%).

Reminder: Yesterday the Nasdaq index slumped by 5.5%, while the DJIA dropped by 3.44%. So this is only a small recovery for the Nasdaq, and further pain for the Dow.

It may seem counter-intuitive, but today’s strong-looking US jobs report could be bad news for technology stocks.

That’s because the US Federal Reserve is more likely to raise interest rates if it believes the labor market can take the strain.

So while the US economy might be stronger than feared, that could lead to higher interest rates – which are monetary kryptonite for tech stocks.

Why? Because technology companies are valued on the promise of bumper earnings in the future (particularly in the nascent AI industry!), and higher interest rates make those future earnings worth less today (because you could just get a higher return from holding a bond, or even cash savings).

Nic Puckrin, a former Goldman Sachs analyst, says:

“The jobs report came in hot and that’s a problem for a tech sector that’s already in the middle of one of its biggest bloodbaths in history. It paves the way for rates to rise again in December and remain higher for longer – all bad news for tech valuations and the increasingly debt-fuelled AI buildout, especially now the sector is already being battered by expectations of stricter policies from the new Democratic Congress.

The numbers give the Fed carte blanche to prioritise inflation over jobs, so ordinary Americans should prepare for a 0.25 percentage point rate hike in December. That means higher borrowing costs, more upward pressure on mortgage rates and less chance of a Santa rally for the stock market. However, it could also mean better returns on cash savings.

Employment in professional and business services increased by 70,000 in October, well above the average monthly gain of 15,000 over the prior 12 months.

Health care added 42,000 jobs in October, with employment gains in hospitals (+16,000), home health care services (+11,000), and outpatient care centers (+5,000).

Transportation and warehousing added 25,000 jobs, due to growth in couriers and messengers (+17,000) and air transportation (+4,000).

Manufacturing employment rose by 19,000, with job gains in computer and electronic product manufacturing (+7,000), machinery manufacturing (+4,000), and primary metal manufacturing (+4,000).

The US unemployment rate has fallen too, to 4.1% from 4.2% in September.

The BLS reports there were 7.1m unemployed people in the US in October, and points out that the jobless rate has remained in a narrow range of 4.1% to 4.3% since March.

Newsflash: The US economy added many more jobs than expected in October.

Total nonfarm payroll employment rose by 165,000 in October, the US Bureau of Labor Statistics has reported, smashing forecasts of a 65,000 gain.

Employment increased in professional and business services, in health care, and in transportation and warehousing, the BLS says.

September’s jobs report has been revised up too - to show 60,000 new jobs were created, up from the first estimate of 29,000.

August was also stronger than first thought – with 186,000 new jobs, up from 133,000.

Wall Street’s fear gauge has dipped slightly, a sign that US investors are slightly less panicky than yesterday.

The CBOE Volatility Index, known as the Vix, is down almost 5% this morning.

Yesterday it jumped by over 69% to its highest level since March, when the Iran war was spooking the markets.

(The Vix is derived from S&P 500 index options, and represents the market’s expectation of volatility over the next 30 days.)

The post-midterms market rout has been particularly painful for Elon Musk.

Musk (who put $446m of support into Republican campaigns), has lost around $113bn of wealth in the last two days.

This is because his two largest companies have both been badly hit in the sell-off.

Tesla fell 3.34% on Wednesday, as investors reacted to the Democrats’ electoral success, then 10.7% on Thursday. Musk owns 17.7% of the carmaker.

SpaceX lost 3.8% on Wednesday, then 9% yesterday – which also hurt Musk as he owns 10.3% of it.

In total, Musk’s paper wealth fell by $33.5bn on Wednesday, and then by another $79.7bn yesterday, according to Bloomberg’s Billionaires Index.

Despite this, Musk is still the world’s richest person with a paper wealth of $785bn, more than double Jeff Bezos in second place with $370bn.

The sell-off in London is gathering pace!

The FTSE 100 share index is now down 189 points, or 1.75%, to 10,593 points.

That would be its biggest one-day drop since 19 March, when the Iran war was hitting the markets.

There were concerned faces on the floor of the New York stock exchange yesterday, as the market suffered its biggest one-day drop in about 19 months:

This fed though to Tokyo, where pedestrians were shown the damage on the Nikkei stock exchange, which fell 6%:

Dealers were busy at Hana Bank in Seoul, South Korea, where the Kospi share index lost 6.5%.

The companies rolling out AI data centres might actually benefit, in the long term, if politicians throw some sand into the wheels of the industry.

That’s because the planned pace of AI rollout has been so quick that it’s forced these hyperscalers (such as Amazon, Meta, Microsoft and Google) into hectic sales of debt and shares to fund new multi-billion dollar supply deals.

Mark Dowding of RBC BlueBay Asset Management explains that this could actually make hyperscalers a more attractive investment, saying:

Indeed, a regulatory-induced slowing of AI-related projects may actually help ensure that the pace of growth is more sustainable going forward.

Over recent months, constant upward revisions in spending plans have led to a deluge of debt and equity issuance, which has been weighing heavily on markets, with demand failing to keep pace with supply.

Should this now slow somewhat, RBC BlueBay think that spreads for hyperscalers may stabilise. Consequently, the firm consider adding exposure in that space, having previously been very sceptical of the prospects for AI-related debt over the course of the past year.

Just in: Wall Street appears to be on track for a calmer day than yesterday!

Technology shares are expected to rise a little after Thursday’s slump.

That’s based on the latest futures market data, which gives an indication of how shares might move when trading begins in New York at 9.30am EST (or 2.30pm UK time).

They show that S&P 500 e-mini futures are up 0.2%, Nasdaq 100 future are up 1.1%, but Dow Jones industrial average futures are down 0.8%

Some context: The S&P 500 is a broad measure of the US stock market, tracking companies in sectors from financials and healthcare to technology, industrials and energy.

The Dow is much narrower – just 30 large US companies.

And the Nasdaq 100 is the one hundred largest tech stocks on Wall Street (eg Apple, Microsoft, Nvidia, Amazon, Alphabet, Tesla…)

But there’s still more than five hours until Wall Street opens, so we shall see!

Chris Beauchamp, chief market analyst at investing and trading platform IG, warns there is a risk of further losses.

“Yesterday’s brutal session marked a dramatic turnaround from Wednesday, but with AI fears still prominent there is a risk that there is much more selling to come. Investors remain on watch for a potential resumption of the Iran conflict, likely to drive a risk-off move across a broader swathe of equities, and are nervously watching the oil price after its slump earlier in the week. All in all it remains a very febrile atmosphere.”

Technology stocks have been dropping since early October, when the Nasdaq Composite hit a record high.

Those losses have been painful for hedge funds who had used borrowed money to back tech stocks (using ‘leverage’, in market jargon).

As the markets have fallen, those leverage bets will have turned sour, prompting margin calls (when your broker demands more cash or collatoral to cover a losing position).

Reuters reports:

Several large multi-manager hedge fund platforms have cut leverage and laid off loss-making teams in recent weeks, said market participants, who expect more layoffs if declines continue.

The post-US midterm market turmoil extended losses after a bruising October, when sentiment was dampened by elevated AI-related borrowing costs and worries over returns.

The Nasdaq 100 index, which contains many tech heavyweights, plunged 6.6% last month, its biggest monthly fall in 18 months. JPMorgan estimates global hedge funds lost 3% in October.

Interestingly, Jefferies economist Mohit Kumar doesn’t believe yesterday’s losses are “the start of the unwind of the AI trade”.

Kumar argues:

We do admit that policy uncertainty after the Blue Tsunami raises concerns over AI investment and the pace of data center buildup.

However, data centers and AI infrastructure also create jobs and Democrats would be reluctant to let those jobs move onto other states or outside the country. AI investment has been a key driver of US growth, and we do not see Democrats as giving up on this growth engine.

There was a huge slump in the most AI-exposed parts of the US stock market yesterday, Jim Reid of Deutche Bank told clients this morning:

In fact, the scale of the moves ranked among the biggest in years, and the Philly semiconductor index (-12.25%) had its worst day since the pandemic slump in March 2020. And in turn, that cascaded elsewhere, with the S&P 500 (-4.36%) posting its biggest slump since the Liberation Day volatility in April 2025.

So that drove a huge surge in the VIX index (+11.6pts), which also saw its biggest daily jump since the Liberation Day period, ending the session at 28.2pts, its highest since March.

Mohit Kumar, economist at investent bank Jefferies, doesn’t expect a quick rebound from yesterday’s losses.

He writes:

In previous episodes of retail selling, institutional investors have stepped in to find value. The approaching year-end complicates the behaviour of institutional accounts as risk appetite would be limited….

The geopolitical uncertainty around possible US action in Iran also suggests that investors would not rush to add risk.

Stuart Clark, portfolio manager at Quilter, points out that the dominance of the tech sector exacerbated yesterday’s selloff:

“The blue wave at the ballot box has quickly been replaced by a sea of red on investors’ screens. Technology stocks have sold off sharply, with the immediate catalyst appearing to be concerns around tougher AI regulation, covering both the models themselves and the vast data centre infrastructure required to support them.

“The scale of the falls in some of the market’s biggest names has been striking. But it also highlights the concentration risk that has built up in US equity markets. With a relatively small number of technology and semiconductor stocks now carrying so much weight, weakness in those names quickly translates into sizeable falls for the Nasdaq and S&P 500.

Amid the scary-everything-is-bad-in-stocks news, it’s easy to feel a bit worried about pensions or savings, my colleague Siraj Datoo writes.

And yes, yesterday was a bad day in particular for technology stocks, with the Nasdaq losing $2.5tn in market capital in a single day.

But it’s worth taking a second to pause. While many of the charts leading newspaper homepages are fairly narrow, showing the dramatic fall in just a few days, if you look at the Nasdaq, the US index mostly dominated by tech stocks, from the start of the year, it’s still up 4.6% YTD (see previous post for more details).

Of course, this correction still could have room to run and markets are famously emotional. But there have been warnings about this. Michael Burry, the famous fund manager behind The Big Short, has been screaming from the sidelines about overvaluations in the tech world.

One of the major concerns right now is the huge data centre buildout in the US and whether Democrats will place restrictions or slow things down. That’s a problem for investors because so many of the world’s biggest companies have invested enormous amounts of money -- often taking on additional debt -- to fund their deep investment. The bet is that the artificial buildout will eventually generate big returns but investors are now increasingly worried about just how long that will take.

Despite the sharp losses suffered on global stock markets around the world, most indices are still up for the year.

The Nasdaq Composite index, for example, is still up 4.6% since the start of January – even though it’s more than 10% below its peak.

Britain’s FTSE 100 share index has gained almost 6.9% in 2026, even though – at 10,615 points – it’s more than 300 points below the record high set in July.

South Korea’s KOSPI is up over 29% year to date – which sounds impressive until you remember that it doubled in the first half of 2026, driven by huge demand for chipmakers Samsung and SK Hynix from the AI industry.

China’s CSI 300 stock index, though, are down over 12% this year – its AI stocks fell sharply a few months ago.

Europe has joined the global selloff.

The FTSE 100 index, which tracks blue-chip shares listed in London, has dropped by 166 points, or over 1.5%, at the start of trading to 10,615 points. Most of the hundred stocks on the index are down.

Pharmaceuticals giant AstraZeneca (-2.8%) are the top faller on the FTSE 100.

Other fallers include IAG (-1.5%) which owns British Airways, after it which missed profit forecasts this morning and warned that its annual capacity would be slightly lower than a year earlier.

Germany’s DAX index is down 1.5%, France’s CAC 40 has dropped by 1.2% at the open, Spain’s IBEX is down 1.1%.

Susannah Streeter, chief investment strategist at Wealth Club, says:

“The tech sell-off has intensified, with the pain of the brutal sell-off on Wall Street carried straight through to Asia and knocking sentiment in Europe.

Big worries are colliding – the build-out of data centres looks set to slow, which risks shredding the spending spree underpinning the boom, right at the time that investors have become super nervous about returns on this massive investment.

Stocks aren’t the only thing dropping in value!

UK house prices fell by 0.6% in October, new data from Lloyds bank shows.

Prices were 1.2% lower than a year ago, the biggest annual fall since October 2023.

A Reuters poll of economists had predicted a 0.1% monthly increase and an annual fall of 0.3%.

Lloyds reports that the average property price dropped to £296,285 last month, down from £298,167 in September.

Andrew Asaam, mortgages director at Lloyds, explains:

“Housing demand is currently being tested by a challenging economic backdrop. Renewed inflationary pressures, driven in part by the conflict in the Middle East, are keeping borrowing costs high and adding to the squeeze on household finances, making some buyers understandably more cautious.

Donald Trump has blamed the Democratic party for the market selloff.

Posting on his Truth Social site, the president wrote:

The Stock Market suffered one of the Worst Days in History based on the results of the Election. Such a sad thing to watch! It took so much work to get us to a level that no one has ever seen before, and then this. Your 401(k)s have, therefore, dropped. Remember, it wasn’t Republicans, it was Dumocrats. Do not fear, however, we will soon, one way or the other, be BIGGER AND STRONGER THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN! President DONALD J. TRUMP

He then appeared to blame the voters too (!), adding:

The Stock Market crashed today because the Dumocrats had a big Tuesday — So sad to see, you only have yourselves to blame! President DONALD J. TRUMP

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

Fears that the Democratic Party’s blue wave in this week’s midterm elections will sink the AI investment boom are roiling markets, following heavy losses on Wall Street last night.

Asia-Pacific markets are a sea of red (unlike the US election map on Tuesday night!), as investors ditch tech stocks after more than $3.2tn was wiped off the US stock market yesterday.

Today, Japan’s Nikkei stock index has slumped by almost 6% – its worst drop since April 7 2025 during the ‘liberation day’ tariff panic.

South Korea’s KOSPI is down 6.7%, and Taiwan’s TAIEX has dropped by 4.5% in a broad rout.

Christopher Forbes, head of Asia and Middle East at CMC Markets, called the market action “a bit of a disaster”, explaining (via Reuters):

“(Clients) were long index, long stocks, and they all got carried out.

“All night, all day – we had client margin calls, client complaints, ... because it’s a very emotional thing, right? People are wedded to their positions and views on a stock or outcome and you’re telling them, look, you’ve just lost money.

“And it’s not just a slap in terms of valuation. It’s basically a whole policy and six-year structural shift that says we’re now going to pause, we’re now going to cool AI, we’re now going to cool data centres, approvals and equity capital markets.”

After months of warnings that AI valuations were too high, and that the bubble might burst, US investors dashed to the exits en masse yesterday. The Nasdaq tech index slumped by 5.5%, while the Dow Jones Industrial Average (DJIA) dropped 1,833.06 points, or 3.44%, and the S&P 500 lost 4.36%.

Memory chip makers, who had been profiting from the AI boom, led the fallers – SanDisk slumped 22% and both Micron and AMD lost 17% of their value.

Chip giant Nvidia led the fallers on the DJIA, down over 9%.

Analysts pointed to policy uncertainty as Democrats are more critical of data centres, which could slow the rollout of AI investment – especially given public opposition to the sector.

Kyle Rodda, senior financial market analyst at Capital.com, says it was a “brutal sell-off” as fears about the future of the AI buildout gripped the markets.

The tumble in tech stocks that took hold in the immediate aftermath of the US midterm elections resumed as investors contemplated what a Democrat-controlled Congress may mean for tech regulation and the overall AI boom.

The regulatory and political risks arise at a time when the proverbial AI trade was already on shakier foundations. Earnings season has been an overall disappointment for the markets, with Magnificent Seven results so far undershooting growth expectations and flashing warning signs that the pace of AI spending is slowing down.

So, it could be a ‘tin hats on’ day in the markets. Investors will also be watching the latest US jobs report, for clues into the health of America’s labour market.

The agenda

• 7am GMT: Lloyds house price index

• 9am GMT: UN’s FAO food price index

• 1.30pm GMT: US non-farm payrolls jobs report

• 3pm GMT: University of Michigan’s US consumer confidence report